ok...Management stated they had over $50 million of backlogged sales
at the end of 2006...so we start at a base for 1Q of $50 becasue they
would have been able to ship those items during the 1Q 07. If they can
get $50 million in sales in 1Q07 a the current margins of 17%...and
28.3 million shares outstanding as stated in the CC...we are at $.30 a
shares for 1Q...current est is .15. Additionally they stated they sold
6.2 million pairs of Heelys which translates to average revenue per
shoe of $30...this 6.2 million was with backlogs of shoes due to
production constraints. The stated in the call that they have current
production ability of 1.2 to 1.4 million pairs a month....if they can
sell 10 million pairs this year that is $300 million in revs for 07
and at a profit margin of 17%...that is 1.80 a share compared to
current estimates of 1.21...that would be a beat of 50% on the current
estimate. We beat today by 57% with production constraints. They also
noted that they would use their production capabilities to possible
add to the product line by adding straight shoes...no wheels...to
their product lines. This is how I see heelys beating the FAD moniker
and being a long term buy...that is what management knows and it seems
they are going to utilize their facilities to maximize shareholder
value. With a forward PE of 25...high end of management expected long-
term growth rate of the company...stock deserves to be at least
$45...but at this point it deserves a high PE of close to 30-40...$54
to $72...look for upgrades on Heelys and raised price expectations
based on this first quarter of results...the stock was trading based
on current estimates and got all the way to $40...next stop
$50....after 1Q07 earnings...I listened to the call twice